SACRAMENTO  The state’s liquor license regulator may soon be brimming with new duties — regulating medical marijuana sales and overseeing alcohol sales during new bar hours from 2 a.m. to 4 a.m.

Separate bills circulating at the statehouse would give those tasks to the California Department of Alcoholic Beverage Control.

Those living in neighborhoods with a proliferation of bars, such as San Diego’s Pacific Beach, are wary of an expansion of ABC oversight. They claim the agency has a conflict of interest because its roughly $50 million budget is generated mostly from license fees.

ABC approved 10,336 permanent licenses to businesses across the state and denied seven in the last fiscal year.

In 2010-11, ABC provided 12,600 licenses and denied four.

In 2009-10, the agency granted 9,444 and denied seven.

Critics say the numbers are indicative of the problem.

“The ABC is ineffective because their incentive is to process licenses,” said Pacific Beach activist Scott Chipman, chairman of San Diegans for Safe Neighborhoods.

“The general public thinks the ABC regulates alcohol licenses. And if you look at their mission statement, you would think so, too. But it appears their primary function on a day-to-day basis is to process licenses. That’s where they expend most of their energy.”

ABC officials say they adhere to the law when reviewing permit applications, which are subject to a 17-step appeals process if an applicant is denied.

“When you apply for a license, there is a due process,” said Matthew Seck, a supervising agent at headquarters in Sacramento. “We have to give a legal justification to deny the license. We can’t just say, ‘We don’t like you.’”

“Even if we decide from Day 1 that there is something so crazy that we’re going to deny, that person has all those steps all the way to 17,” he said.

The agency is no different from others tasked with overseeing doctors, dentists, attorneys, hairstylists, real estate agents and other professions that pay for licenses, Seck said. He called the contention of a conflict “an interesting policy argument.”

“That’s how the government works versus general fund agencies that take sales and property taxes,” he said.

Seck added that the annual figures don’t account for the number of applicants that withdrew requests when it became apparent they faced stiff opposition.

“Let’s say this neighborhood group said, ‘These 10 bars are the worst and I want them gone.’ And we just snapped our fingers (obviously we can’t). Still, that would be about $6,000 less a year,” Seck said. “To say that we would not get rid of these 10 worst places because it would be $6,000 less a year in our $50 million budget really doesn’t add up.”

Marcie Beckett, another San Diego critic of the process, said it generally lacks transparency. Residents learn about new applications only by seeing a notice in the window, she said.

“If you have the money to hire a good lawyer you can keep appealing and get your license even if it’s protested by the local police and denied by the local ABC,” Beckett said. “Ninety-nine percent of the time they win and 1 percent we win.”